Amid the debate over AI’s role in limiting job opportunities for Gen Z, there is also the fact that for decades many parents have been encouraging their kids to go to college.
That means the share of the workforce with a bachelor’s degree is larger than it was in prior generations, creating a new dynamic for Gen Zers who have just finished college and are looking to launch their careers.
In a note on Thursday, Ed Yardeni, president and chief investment strategist at Yardeni Research, examined unemployment among recent college grads and the potential factors contributing to it.
He pointed out that graduates from the age of 22 to 27 have historically enjoyed a lower jobless rate than the overall workforce. But that started to change around 2015—well before the advent of OpenAI’s chatbot in late 2022 and the rush into generative AI that followed.
In fact, data compiled by the New York Fed shows that the unemployment rate for recent grads edged above the total rate in December 2014, when it was 5.6% versus 5.5%. The years that followed saw the two rates go back and forth, trading places.
But during the pandemic, joblessness among recent college grads began consistently exceeding the overall rate. And in early 2022, the separation between the two trend lines started widening.
By contrast, the jobless rate for all college graduates across every age group has stayed well below the total rate for at least 35 years.
New York Fed
According to the latest data, the unemployment rate for recent grads was 4.8% in June, while it was 4.0% for all workers.
“Why this change? It may be due to the increase of college educated people in the workforce generally these days, so the new entrants are competing for jobs with more experienced college graduates,” Yardeni wrote.
Citing the Education Data Initiative, he added that the percentage of Americans with a bachelor’s degree or higher is now 37.5%, up from 25.6% in 2000. And between 1993 and…